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Farsley Celtic 1 : HMRC 2 L

Posted by John Beech on June 28, 2009

Farsley Celtic are in deep, deep trouble, for reasons which I partly sympathise with, but which are partly of their own making.

The glory years for Celtic have been very recent – promotions in 2004, 2006 and 2007 under Lee Sinnott, who then moved onwards and upwards to Port Vale (1). Suffering from Gretna Syndrome, Celtic struggled to muster the support in the Conference National that might have made them a ‘Tranmere’ to Leeds United and Bradford City, and after just one season were relegated back to the Conference North.

The club’s plan for financial stability was to sell some land and build 26 houses and 31 flats (2). First rejected by the local planning authority back in February 2008, the club fought on but to no avail.

Meantime, the debts were mounting up, most significantly a £200,000 tax bill due to HMRC, quite a large debt for a Tier 6 club with problems in maintaining their revenue streams (3).

As HMRC became more demanding and sought a Winding-Up Order, Celtic decided to protect themselves by going into Administration (4). Unfortunately they have left it too late, as HMRC are refusing to hold back with the Winding-Up Order to allow for time for an Administrator to be appointed (5).

This hard line approach by HMRC is consistent with their attitude since they lost preferred creditor status, and as a result football creditors in effect assumed the preferred creditors status. This is frankly an absurdity – why should Barchester City who sold a club a old pitch roller have a higher claim than the government body which collects taxes? If the government is for whatever reason unwilling to restore HMRC’s preferred creditor status, then football’s governing bodies should review the football creditors rule, and ensure that clubs see paying their corpoartion tax, national insurance contributions and VAT (tax which they have collected on behalf of HMRC) as the highest priority.

Farsley Celtic’s President, John Palmer, has admitted with respect to HMRC “it has perhaps not helped that in the past our payment record has not been the best” (6). That is true of too many clubs, and increasingly they will pay the price.